There have been a slew of reports surrounding the impact of the One Big Beautiful Bill (OBBB) on renewable development in the U.S.  Estimates of cutting the build-out of new clean power by over 50% as reported by the Rhodium Group to a 17% decrease in solar as reported by Wood Mackenzie. Other reports show an expansion in gas additions as the economics change.  In this Special Report, we take a look at drivers of capacity additions in the WECC in the context of load growth and RPS requirements to frame up how the OBBB may impact renewable energy additions in the western states. 

The OBBB impacts renewable energy tax credits for wind and solar the most by requiring projects to be in service by the end of 2027 or start construction in the next twelve months and be in service by the end of 2030.  Interestingly, in the spirit of picking winners and losers, other technologies such as geothermal and battery storage can get the tax credit if under construction by the end of 2033 and partial tax credits for the following two years. 

While the knee jerk reaction to this bill is that massive reductions in solar and wind additions will be seen, there is always some nuances to consider in the energy sector, particularly in the WECC.  The capacity additions in the WECC are driven by load growth and Renewable Portfolio Standards (RPS) or other Clean Energy Standards (CES) as legislated by each State.  In fact, most states in the WECC have RPS goals and very ambitious RPS goals at that. Take for instance the coastal States of Washington, Oregon and California.  These States have the highest load in the WECC and the most ambitious clean energy requirements. 

In a recent Special Report titled “0BBB(e) Ok?”, we laid out a framework for analyzing the impacts of the OBBB on renewable energy additions in the WECC. Our analysis started with a load forecast for each state in the WECC grouped by RPS and non-RPS States.  We found that RPS States are projected to have 85% of the load in the WECC over the next five to fifteen years. If we only assuming new load will be met with renewable energy in these States, we would still need to add about 9 GW of renewable energy every year over the next fifteen years!  The figure below helps put this value in context

 Figure 1 | Wind and Solar Capacity Additions in the WECC from 2010 to 2024

The figure above shows historical wind and solar capacity additions in the WECC from 2010 to 2024 using data from the EIA 860.  The capacity additions hit a record high of just over 8 GW in 2024 but have been much closer to 6 GW since 2020.  Comparing this to the new load requirement of 9 GW per year as calculated above would suggest that the demand for wind and solar capacity additions will be strong.  And while the cost of adding this technology will increase with the OBBB, if one assumes the load growth is real and the State-level policy doesn’t change, we may just continue to see record additions of renewable energy in the WECC.

Of course, for States without RPS requirements, the OBBB changes the math with respect to the cost of adding natural gas vs. renewable energy. One tool we have to examine this is our long-term production cost model (PCM) for the WECC.  In the PCM we can simulate a future with and without the OBBB to understand impacts on capacity additions in both RPS and non-RPS States.  For more information on the PCM, or our other offerings please reach out to us using the Contact Us form on the Energy GPS website (under About Us) or email us at [email protected].